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Petronet LNG Limited Q3 FY24 Earnings Conference Call Insights

Key highlights from Petronet LNG Limited (PETRONET) Q3 FY24 Earnings Concall

  • Financial Performance
    • Registered highest ever PBT of INR1,597 crore and PAT of INR1,191 crore in Q3 FY24.
    • PBT increased 46% compared to previous quarter and was flat versus last year’s Q3.
    • PAT increased 46% versus previous quarter and was flat versus last year’s Q3.
    • Volume throughput at Dahej terminal increased 21% compared to the prior year nine month period.
  • Operating Performance
    • Dahej terminal utilization was 96% in Q3 FY24.
    • Total throughput volume at Dahej and Kochi terminals was 232 TBT in Q3 FY24.
    • Higher utilization of Dahej terminal and efficiency in operations drove profitability growth.
  • Outlook
    • Petronet LNG registered robust volume growth in nine months of FY24.
    • Higher volumes along with high utilization levels at Dahej terminal are expected to continue driving profitability going forward.
  • Red Sea Disruption
    • Petronet LNG has long-term contracts with Qatar for LNG supply, so no impact on those cargoes.
    • Disruptions could impact LNG cargos transiting through Suez Canal and Red Sea from sources like US.
    • But Petronet does not expect impact on cargoes coming to its terminal, even from other sources.
  • Receivables
    • INR1,263 crore of receivables outstanding for user pay charges in 2021 and 2022.
    • Settlement reached with customers to provide bank guarantees securing these receivables.
    • No revenue loss or accounting impact for Petronet, receivables are secured.
    • If volumes shortfall is made up by 2024/2025, user pay charges will be waived.
    • Already recognized revenue from user pay charges will be reversed.
  • Increase in Opex
    • INR228 crore provision created against receivables, adjusting it OPEX is in line.
    • As receivables recovered, provisions will be reversed over time.
    • Increased OPEX is temporary accounting impact, will normalize.
  • Kochi/ Gorgon LNG
    • Kochi terminal gross margin impact was INR136 crores.
    • Service revenue was INR623 crores, depreciation and finance costs were INR84 crores and INR69 crores.
    • Year-to-date Gorgon LNG volumes were 14.4 cargoes compared to 9 cargoes in Q2 and 8 cargoes in prior year Q3.
  • Trading and Inventory Gains
    • Trading gains were INR40 crores versus INR19 crores in Q2.
    • Inventory gains were INR147 crores.
  • Kochi-Mangaluru Pipeline Project
    • 250 km section from Coimbatore to Bangalore expected to complete by end of 2022.
    • Will connect Kochi terminal to national gas grid.
    • Should enable additional gas volumes from Kochi terminal from FY25.
  • Bank Guarantees Status
    • Bank guarantees being taken for full INR1263 crores of user pay charges.
    • Some operators have provided BGs, others in process of providing.
    • Settlement agreements also being formally signed.
  • Upcoming Projects
    • Dahej expansion to 22.5 MTPA by Mar 2025.
    • New jetty at Dahej at cost INR1700 crores by 2024.
    • Can handle LNG, propane, ethane.
    • 2 new LNG tanks at Dahej by Jun 2024.
    • FSRU terminal planned at Gopalpur, Odisha.
    • Expected to take 3 years for completion.
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